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Wednesday, 2 June 2010
Page: 4928

Mr RANDALL (11:07 AM) —The Airports (On-Airport Activities Administration) Validation Bill 2010, while being technical in nature, gives me the opportunity to speak about the more substantial commercial nature of airports. Before I continue, I would just like to say I agree with many of the sentiments of the member for Makin. Obviously, we who use the airports get a lot of feedback from constituents on some of the negative aspects of trying to get through and use the airport car parks in any sort of friendly way.

This bill before us corrects an administrative error regarding the issuing of parking notices at Australian airports, and validates those tickets issued in error. Again, we are fixing up a problem which, as I said, the airports themselves have generated. In some respects I do not really like being associated with a retrospective validation of parking tickets, but it was an unintended consequence that I suppose requires the support of this parliament to correct.

There have been some 100,000 parking tickets that have been issued at airports around the country by people who were not authorised to issue them. I am sure that those 100,000 drivers who received the tickets would be delighted to hear that they were not validly charged, and that they will be getting their money back, but you can appreciate that this would result in a huge administrative nightmare—so, as I said, it falls upon the parliament to correct this problem. Of course, there are legal ramifications of failing to validate these tickets. The issuing of a ticket by an unauthorised person does not result in the offence being invalidated—the person has still parked illegally according to the rules—so this precludes any challenge. It means the tickets cannot be used as evidence if a fine is challenged in court. Prior to the realisation of the error the list of authorised persons had not been updated since 2004. Now we can be confident that this list has been corrected up until March 2010. Unfortunately for the tickets issued during that time, this is, as I said, retrospective in its nature. We do not like anything in this place that is retrospective in its nature.

Obviously, there is an interest by airport lessees to pursue commercial developments around airports. It is no secret that Australian airports make a significant proportion of their income through non-aviation means. It is important to note that large developments on airport land require government approval. It is commonplace now that factory outlets, parking, shopping, hotels, conference facilities, transport hubs and a whole range of industry are now to be found on leased airport land. Last year master plans for nearly all of the nation’s airports were approved, including plans for commercial expansions. The development approval process is extensive and has become more stringent in recent years. It is important to note how important the commercial aspect is, because it allows investment in aviation infrastructure. Privatisation of airports by the previous government has resulted in more than $2 billion being invested in federal airports, with billions more committed. The industry supports this case, saying that the commercial development is good for the economy: every $1 billion of capital investment generates something like $800 million in wages, and we have seen the employment of 19,000 workers as a result.

In 2006 the Productivity Commission reported—so these figures are reasonably old, but they give an indication—that 61 per cent of Canberra Airport’s revenue was generated from non-aeronautical activities. For Perth the figure was 53 per cent and for Sydney it was 39 per cent. So we are talking about large percentages of profit being generated by commercial operations on airport land. Particularly in times where revenues have fallen, airport operators are looking to make their money through other means. Last year, Olivia Wirth, the then Executive Director of Tourism and Transport Forum, said:

Air services will always be Australian airports first priority. However, with a recession bearing down—

which it was at the time; it never happened but it was bearing down—

it is time to remove the stigma about non-aeronautical development.

Airport’s leases can easily be seen as a licence to print money. Recent figures show that Sydney Airport’s profits are 80 per cent of operating revenue. Whilst the debt of most operators is huge, Sydney Airport makes $5 for every $1 it spends on its operations. More and more airports are generating revenue from the development of leased land that is not subject to aviation reserve, as they are well within their rights to do, as long as they comply with their conditions. Major developments of over $20 million require the approval of the minister.

The heart of this bill, the parking fees, are a great source of revenue. Last year, for example, Melbourne Airport brought in $95 million in parking fees—in fact, it was 20 per cent of its revenue. Perth is much the same. While I am on the subject of Perth, Mr Deputy Speaker Washer, as you and I are both from that fantastic, resource-rich state, we know that the shambolic nature of parking at Perth Airport has been an issue for some time. In fact, as you drive into the Perth Airport you will see cars parked in the evening up and down Brearley Avenue, because they either cannot or will not go into the car parks at the Perth Airport. They will not or cannot either because the car parks are full or because they are too expensive to use. This huge amount of parking up and down the road reserve is a problem that needs to be addressed. In some respects it is dangerous. It is certainly opportunistic by those who want to sit there with their engines running, waiting for somebody to get off a plane and to duck into the airport to pick up the person getting off the plane.

The problem is further exacerbated by the fact that the entry into the airport parking apron is now becoming so congested. Just the other day my own experience was that I had to get out of the car and cut across the car park to make sure I was not late for the cut-off time on the plane, because there was a huge queue to get into the parking and drop-off areas of the Perth Airport. I will address this issue a bit further in my speech here today when I talk about the parking problems for fly-in fly-out workers.

In 2008-09, Perth Airport generated $29 million from parking—double what it made in 2004-05. With airport revenue of $165 million in 2008-09, that means that 17.2 per cent of Perth Airport’s revenue came from parking—up from nine per cent in 2004-05. Perth Airport added almost 1,500 car parks last year, predominantly in the new long-term car park. While car park operating expenses have risen—including the need for CCTV security and shuttles—they remain well below the revenue, meaning there is always a tidy profit.

Again, I go to the fly-in fly-out workers and those wanting long-term parking at the Perth Airport. If you live in the vicinity of the Perth Airport, from five in the morning you will see a succession of planes heading out of Perth every five minutes, generally to the mining centres like Leinster and Pannawonica, on their regular shuttle of workers to these areas. And you will see a massive number of taxis picking these people up in the suburbs beforehand. The problem is that if you do not get a taxi and you want to park around the Perth Airport not only will you find it expensive but you will find that this parking is well away from the airport terminal. So then you have the problem of catching a shuttle bus. It really is an issue that the owners of the airport have not kept up with. Through my office—because I have a lot of fly-in fly-out workers in my electorate of Canning—I receive regular complaints from people who have to make use of the long-term car park and are not happy with the service they get.

There is huge amount of buffer land surrounding Australian airports, and with that comes opportunity. For example, Brisbane has the largest buffer zone with 2,700 hectares, and 1,000 hectares of this is available for non-aviation commercial use. Sydney, in its 99-year lease, leases 907 hectares—three times smaller than Brisbane. Perth has quite a large buffer zone of 2,100 hectares. Adelaide has only 785 hectares. Melbourne has quite a large buffer zone of 2,379 hectares, but this is set to increase with land acquisition underway to enable the construction of two more runways.

We have recently seen the release of the aviation white paper, which focused some attention on the commercial nature of airport operations. The white paper recommended the government make the move to prohibit residential development projects, such as housing adjacent to runways. This happened recently in the Jandakot Acourt Retreat development. Of course it is only sensible not to encourage residential development in close proximity to an airport because of the noise contours which surround airports. As soon as you allow a residential development close to an airport you can rest assured that offices like mine and those of the member for Swan and the member for Perth will receive lots of phone calls from people about aircraft noise over their houses and in their neighbourhoods. I really think we have to be very strong on this because we have seen what happened with Sydney, where insulation and double glazing was needed for those who lived close to the airport. Anyone who allows new residential development close to an airport is just begging for trouble in the future.

Another of the main issues addressed in the white paper was the increasing trend of investment in non-aviation related developments at major airports. Since 1998 there have been 48 major development plans on leased airports throughout the country. Sixty-five per cent of these were for non-aviation related development. In the last five years non-aviation related development has far exceeded investment in aviation related infrastructure.

One of the major concerns was the $20 million threshold, because large shopping centres and the like could be completed for under $20 million and therefore fell under the level required for public consultation, despite potentially having a major impact on the lifestyle of those living near airports and having a major impact on other commercial operations near airports.

I will now refer to this concern about some of the commercial developments on the airports. When I was the member for Swan in 1996 there was a huge campaign, which went under the acronym RAGE—Retailers Against Government Enterprise—at Perth airport. A champion of the media—a guy called WW Mitchell—led the charge on this. Because it was on Commonwealth land developers did not need to seek local planning approval, state government approval or even the Belmont City Council’s approval for construction. This would have had a huge impact on other commercial suburban shopping centres in the area. It was thought at the time that it would have a detrimental impact.

As a result, this campaign attracted the interest of the state government of the time. They were talking about cutting off roads to the airport and utilities like electricity and water if they were not allowed to be involved in consultation about this development on Commonwealth land. In some respects the state and local governments brought this upon themselves because of their rather tortuous approval processes for similar developments in the state or in their neighbourhoods. So, of course, people thought, ‘At least we can go to the Commonwealth jurisdiction—land owned by the Commonwealth—in the airport buffer zone, because we will not have to go through this massive and tortuous process that has been afflicting us.’ They did that, and they are continuing to do so, because it seems to be far easier to build on airport buffer zones than in the suburban areas, where state and local governments make things difficult for them.

As a word of caution, there needs to be a greater consultative process so that there are not future concerns like this. Perth Airport has 2,100 hectares of land in its reserve. Passenger numbers have increased by almost 50 per cent since 2004. Revenue from aviation purposes has increased by eight per cent between 2004 and 2009. It is a really good money maker and they had their master plan approved last year. In the financial year to June 2008, Perth Airport recorded a profit of $84½ million—an increase of more than 45 per cent on the previous year because of the huge growth in not only international and domestic airfares but also in the number of fly-in fly-out workers in the resource industry. As an aside, Jandakot Airport Holdings wanted to clear bushland half the size of Kings Park at its lease site, largely for business use, which caused a fair bit of concern to those people surrounding the airport.

The $1 billion redevelopment of Perth Airport has been shrouded in uncertainty and it has been no secret that I have been pretty critical of leaseholders, the Westralia Airports Corporation. The reason is that before the last federal election the Labor government, then in opposition, had endeavoured—and this is from an article by Geoffrey Thomas—to offer $80 million as an incentive for them to do a billion dollar redevelopment, but they rejected it. I suspect that this might have had something to do with trying to save the federal seat of Swan, which did not work. The fact is, they had an opportunity to make a huge quality investment in Perth Airport. The aviation guru Geoffrey Thomas wrote at the time:

The economic landscape has changed since last May when WAC promised a two-stage makeover that would deliver one of the best airports in the Asia Pacific region …. However, WAC later conceded that rather than a showcase airport, such as at Singapore, Perth would get a ‘minimum standard Class C airport’, similar to most in Australia, as rated by the International Air Transport Association.

This was an opportunity lost, because one of the reasons the Westralia Airports Corporation have a problem is they paid too much for the airport in the first place and they have been struggling ever since to make it a commercial operation. Even though they are making good profits, they have always struggled with the fact that they paid too much. The cost of borrowed money has always been an issue for them. They have actually been very, very slow in the delivery of many of the promises around Perth Airport. Yes, there have been some improvements, but they are glacial in nature. They are so slow. Look at airport parking. They have reneged on the second runway even though there is a very good case now about aircraft movements. The second parallel runway would take a lot of pressure from the aviation industry and aircraft arrivals and departures, and they have shelved this.

One of my contentions is that, realistically, we should be putting more pressure on the Westralia Airports Corporation to deliver this world class airport and to deliver the infrastructure to be ahead of the game rather than be behind the game. They have even been criticised by the previous Labor Premier of Western Australia, Alan Carpenter, for what they have done about the lack of infrastructure at Perth Airport. We used to laugh about the Adelaide Airport once, but Adelaide now is one of the showcases. Perth Airport is probably the worst of the major capital cities of this country in what it delivers.

One day someone is actually going to decide, at a government level, that they are not doing the job and maybe they will want to re-bid the lease, if they cannot come up with funds to provide the airport that is appropriate for Western Australia’s growth—particularly as there is a massive amount of increased aviation related activity going through Perth Airport. They have suggested that the work in Terminal 3 is going ahead, but it is going ahead slowly and is not meeting the needs. I think they need to be held far more accountable in the future because it is a showcase for Western Australia and they need to deliver, as they should, on any revised master plan for Perth Airport.